The South Dakota Stockholders' Rights Plan, also known as a "poison pill" plan, is a corporate governance mechanism designed to protect stockholders' interests in the event of a hostile takeover attempt or any other unsolicited acquisition proposal by an outside party. The plan is specifically implemented by Data scope Corp., a company incorporated in South Dakota. Under the South Dakota Stockholders' Rights Plan of Data scope Corp., the board of directors is granted the authority to issue rights to existing stockholders, allowing them to purchase additional shares at a discounted price in the event that a hostile takeover attempt occurs. These rights are generally triggered when a certain percentage of the company's shares are acquired by an outside party without board approval, or if there is a merger or acquisition that would transfer a substantial portion of the company's assets. The purpose of this plan is to deter potential hostile acquirers from pursuing a takeover, as it will significantly dilute their ownership stake and make the acquisition economically unviable. The South Dakota Stockholders' Rights Plan empowers the board of directors to act in the best interests of the stockholders and provides them with the necessary tools to negotiate better and fairer terms in the event of any potential acquisition. One notable feature of the South Dakota Stockholders' Rights Plan is its "flip-in" provision. This provision allows existing shareholders, excluding the acquiring party, to buy additional shares of the company's common stock at a discounted price. This further strengthens the shareholders' position by giving them the ability to increase their ownership stake at a reduced cost and maintain control of the company. There may be variations or iterations of the South Dakota Stockholders' Rights Plan in existence, tailored to the specific needs and preferences of different companies. However, the overall objective remains the same — providing stockholders with protections against hostile takeovers and ensuring that the board of directors can act in the best interests of the company and its shareholders. In summary, the South Dakota Stockholders' Rights Plan of Data scope Corp. is a crucial corporate governance mechanism that allows the company's board of directors to fortify stockholders' interests during potential hostile takeovers. By granting rights to existing shareholders, it creates a disincentive for outside parties to pursue unsolicited acquisitions. The plan includes features such as flip-in provisions, enabling existing shareholders to purchase additional shares at a discounted price. Although there may be various iterations of the plan, its main objective remains consistent — safeguarding stockholders' rights and empowering the board of directors to act in the company's best interests.